UK & INTERNATIONAL INCOME UNIT TRUST

Transcription

1 UK & INTERNATIONAL INCOME UNIT TRUST FOR THE PERIOD ENDED 31 MARCH 2014

2 Manager St. James's Place Unit Trust Group Limited PO Box 9034, Chelmsford, CM99 2XA United Kingdom Freephone: (Authorised and regulated by the Financial Conduct Authority) Directors of the Manager D. C. Bellamy A. M. Croft I. S. Gascoigne D. J. Lamb Secretary of the Manager St. James's Place Administration Limited Investment Adviser Artemis Investment Management LLP 42 Melville Street Edinburgh, EH3 7HA United Kingdom (Authorised and regulated by the Financial Conduct Authority) Trustee BNY Mellon Trust & Depositary (UK) Limited 160 Queen Victoria Street London, EC4V 4LA United Kingdom (Authorised and regulated by the Financial Conduct Authority) Registrar International Financial Data Services (UK) Limited IFDS House St. Nicholas Lane Basildon, SS15 5FS United Kingdom (Authorised and regulated by the Financial Conduct Authority) Auditor PricewaterhouseCoopers LLP Atria One 144 Morrison Street Edinburgh, EH3 8EX United Kingdom Prospectus and Manager's Reports Copies of the up to date Prospectus (Scheme Particulars) and latest Manager's Report and Financial Statements for the range of St. James's Place Unit Trusts can be requested from a member of the St. James's Place Partnership or, at any time during normal business hours, from the Administration Centre at PO Box 9034, Chelmsford CM99 2XA. Freephone:

3 Report of the Manager During the period under review, 1 October 2013 to 31 March 2014, the St. James's Place UK and International Income Unit Trust Income unit offer price rose by 3.6% from 125.2p to 129.7p and the Accumulation unit offer price (in which revenue is reflected in the price rather than distributed) rose by 5.1% from 138.7p to 145.8p. On the 28 May 2014, the latest available date before the printing of this report, the Income unit offer price was 133.7p and the Accumulation unit offer price was 151.6p. The estimated yield was 3.60%. The Trust's Performance The performance of the Trust since its launch in October 2010 and over the period under review is shown below, together with figures for the most commonly quoted indices in comparable markets where the major proportion of the Trust has been invested. St. James's Place UK and International Income Unit Trust Income units (offer to offer) Accumulation units (offer to offer) Indices - actual FTSE All-Share MSCI World (net income reinvested) Source: Lipper for Fund returns 18/10/10 to 30/09/13 to 31/03/14 31/03/14 % change % change REMEMBER THAT THE PRICE OF UNITS AND REVENUE FROM THEM MAY GO DOWN AS WELL AS UP. PLEASE BE AWARE THAT PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE PERFORMANCE. Investment Adviser's Comments During the period under review, the UK market rose by 4.8% and the portfolio outperformed by 1%. In the early part of the period, the combination of some tentative improvement in the macro outlook, together with expectations of resumption in earnings growth, was encouraging for investors. However, of late, whilst there are still some positive signs from the US and some economies, the earnings growth the market craves remains as elusive as it has been for the last two or three years. This is partly due to adverse currency movements. The positive and negative contributors to performance broadly negated each other. The principle negatives were the difficulties at RSA as a consequence of the Irish fraud, and the government interventions affecting William Hill and the energy companies. On the positive side, our holdings in Laird and London Stock Exchange performed well, whilst the US railroad company, Norfolk Southern, continues to benefit from a strengthening economy. Finally, we were fortunate to benefit from the bid for Time Warner Cable from which we subsequently took profits. There were no thematic changes to the portfolio and we are comfortable with our cash position. We added to Sanofi, a European drug stock, and increased our position in Novartis at the expense of Roche. In the US, we bought the oil refiner HollyFrontier which is benefiting from shale gas. In the UK, we are attracted to the changes in the travel business at TUI Travel, which we think makes for a better, more sustainable cash flow profile than has been the case hitherto. We stand by our view that the withdrawal of quantitative easing ( tapering ), has already caused a volatile and difficult period for markets, and will continue to do so. However, over the longer term it is welcomed in as much as it represents a return to normality for economies. Nevertheless, in the absence of any renewed momentum in corporate profits, many companies have been revalued during the last two to three years and as a result there is limited scope for this to be a driver of markets. Therefore, we caution that a lack of earnings growth may make markets vulnerable. Artemis Investment Management LLP 14 April

4 Performance Record The St. James's Place UK and International Income Unit Trust was first offered on 18 October 2010 at an offer price of p per unit. Unit Price History Calendar year * Income Accumulation Highest Lowest Highest Lowest Offer Bid Offer Bid p p p p Distributions The record of net distributions paid/payable per unit is shown below: Income Accumulation Net revenue distributed Net revenue distributed per 1,000 per 1,000 Invested Invested per unit at 18/10/10 per unit at 18/10/10 Calendar year p p * Net Asset Values Year ended September * Units in Issue Units in Issue Market NAV per Unit NAV per Unit Income Accumulation NAV of Trust Income Accumulation '000 p p 24,338, ,319, , ,151, ,958, , ,040, ,190, , ,339, ,157,457 1,146, Ongoing Charges Figure The Ongoing Charges Figure for the period ended 31 March 2014 was 1.92% (30 September 2013: 1.93%). The Ongoing Charges Figure ('OCF') is the total expenses paid by the Trust in the period, annualised, against its average net asset value. It excludes the cost of buying or selling assets for the Trust (unless these assets are shares of another trust). The OCF can fluctuate as underlying costs change. Risk and Reward Profile The synthetic risk and reward indicator for the St. James s Place UK & International Income Unit Trust, as disclosed in its most recent Key Investor Information Document (KIID), is a 5. It was calculated using performance data up to 3 March The risk category is recalculated weekly, in October 2013 the SRRI changed from a category 6 to a category 5. * To 31 March

5 Investment Assets as at 31 March 2014 (unaudited) Security Holdings Market Value 000 % of Net Assets BERMUDA (0.46%) 5, Silverlake Axis 12,000,000 5, CYPRUS (0.85%) 11, Prosafe 2,322,598 11, DENMARK (1.14%) 13, TDC 2,443,673 13, FRANCE (0.00%) 23, Sanofi 371,836 23, GERMANY (5.82%) 43, Bayer 297,638 24, Deutsche Post 836,373 18, IRELAND (1.04%) 9, Origin Enterprises 1,554,367 9, JERSEY (0.53%) 32, Glencore Xstrata 10,581,757 32, POLAND (0.00%) 9, Energa 2,650,578 9, SWITZERLAND (2.85%) 40, Novartis 797,857 40, UNITED KINGDOM (81.05%) 886, Aerospace & Defence BAE Systems 2,351,131 9, Cobham 5,825,463 17, Ultra Electronics 617,869 11, Banks Barclays 9,370,455 21, HSBC 7,884,238 47, Lloyds Banking Group 16,983,927 12, Electricity Drax 1,936,349 14, SSE 1,427,473 21, Electronic & Electrical Equipment Laird 4,097,642 12, Equity Investment Instruments Ecofin Water & Power Opportunities 2,000,000 2, Financial Services 3i 5,724,934 22, IG 1,612,830 10, London Stock Exchange 710,107 14, Fixed Line Telecommunications BT 6,999,225 26, Food Producers Tate & Lyle 1,749,603 11, Gas, Water & Multiutilities Centrica 7,711,831 25, General Industrials Smiths 132,948 1,

6 Investment Assets (continued) as at 31 March 2014 (unaudited) Security Holdings Market Value 000 % of Net Assets General Retailers Halfords 2,074,474 9, Kingfisher 4,359,119 18, Health Care Equipment & Services Smith & Nephew 875,219 7, Household Goods & Home Construction Persimmon 826,258 11, Reckitt Benckiser 468,331 23, Industrial Engineering Melrose Industries 2,356,889 6, Industrial Transportation BBA Aviation 731,663 2, Life Insurance Legal & General 16,151,411 33, Phoenix 1,430,533 9, Standard Life 4,674,972 17, Media Informa 2,097,260 10, Pearson 1,211,083 12, Reed Elsevier 2,403,800 22, Mining Rio Tinto 1,064,579 35, Mobile Telecommunications Inmarsat 1,376,146 10, Vodafone 8,598,222 19, Non Equity Investment Instruments St. James's Place Money Market Unit Trust L Acc 39,520,213 41, Non Life Insurance Direct Line Insurance 4,290,779 10, RSA Insurance 9,317,635 8, RSA Insurance Rights 09/04/2014 3,494,113 1, Oil & Gas Producers BG 718,979 8, BP 10,435,429 50, Premier Oil 1,738,538 5, Royal Dutch Shell 'B' shares 1,210,288 28, Pharmaceuticals & Biotechnology AstraZeneca 752,476 29, GlaxoSmithKline 2,965,795 47, Real Estate Invesment Trusts Assura 15,350,000 6, Segro 4,259,673 14, Tritax Big Box 9,850,000 10, Sterling Issues Fidelity International 7.125% 13/02/2024 GBP2,500,000 2, Support Services Rentokil Initial 10,865,285 13, Tobacco Imperial Tobacco 1,369,244 33,

7 Investment Assets (continued) as at 31 March 2014 (unaudited) Market Value 000 % of Net Assets Security Holdings Travel & Leisure Greene King 1,187,129 10, TUI Travel 2,968,463 13, William Hill 5,497,901 18, UNITED STATES (5.72%) 58, HollyFrontier 498,290 14, Johnson & Johnson 254,509 14, Norfolk Southern 302,032 17, Verizon Communications 414,579 11, DERIVATIVES (0.10%) 1, Forward Currency Contracts Sold CHF54,310,000 for GBP37,463,182 Settlement 20/06/ Sold DKK112,850,000 for GBP12,678,351 Settlement 20/06/ Sold EUR83,867,000 for GBP70,290,610 Settlement 20/06/ Sold NOK93,000,000 for GBP9,358,980 Settlement 20/06/ Sold NOK5,700,000 for GBP571,628 Settlement 20/06/ Sold NOK7,900,000 for GBP786,795 Settlement 20/06/2014 (4) - Sold PLN2,500,000 for GBP495,738 Settlement 20/06/ Sold PLN42,350,000 for GBP8,354,672 Settlement 20/06/2014 (22) - Sold SGD10,089,000 for GBP4,801,611 Settlement 20/06/2014 (14) - Sold USD88,340,000 for GBP53,246,378 Settlement 20/06/ Investment assets ^ 1,135, Total other assets (net) 10, Net assets 1,146, Comparative figures shown in brackets relate to 30 September All investments held are listed, unless otherwise stated. Derivative contracts were traded on an eligible derivatives exchange. During the period under review the Manager decided to place some of the sterling cash held on deposit into the St. James s Place Money Market Unit Trust in order to spread risk across a number of institutions. The St. James s Place Money Market Unit Trust is highly liquid and is rated AAA by Standard & Poors. This investment is a related party. ^ Including investment liabilities of ( 39,260). 6

8 Material Portfolio Changes Cost Purchases 000 St. James's Place Money Market Unit Trust L Acc 181,329 Glencore Xstrata 29,562 GlaxoSmithKline 28,367 Barclays 25,761 Sanofi 22,518 Novartis 19,726 Deutsche Post 17,918 HollyFrontier 14,173 Imperial Tobacco 12,935 TUI Travel 12,660 Proceeds Sales 000 St. James's Place Money Market Unit Trust L Acc 179,011 BHP Billiton 17,215 Deutsche Telekom 16,495 Cisco Systems 15,827 Time Warner Cable 14,873 Deutsche Post 14,296 Unilever 12,348 Merck 11,310 Carnival 9,492 British American Tobacco 9,279 This investment is a related party. 7

9 Statement of Total Return for the period 01 October 2013 to 31 March 2014 (unaudited) Income Net capital gains Revenue Expenses Finance costs: Interest Net revenue before taxation Taxation Net revenue after taxation Total return before distributions Finance costs: Distributions Change in net assets attributable to unitholders from investment activities 01/10/13 to 31/03/14 01/10/12 to 31/03/ ,923 66,434 15,791 9,553 (9,888) (5,427) (2) - 5,901 4,126 (436) (247) 5,465 3,879 49,388 70,313 (14,840) (8,957) 34,548 61,356 Statement of Change in Net Assets Attributable to Unitholders for the period 01 October 2013 to 31 March 2014 (unaudited) 01/10/13 to 31/03/14 01/10/12 to 31/03/ Opening net assets attributable to unitholders 928, ,031 Movement due to creation and cancellation of units: Amounts receivable on creation of units 172, ,623 Amounts payable on cancellation of units (3,312) (571) Stamp duty reserve tax Change in net assets attributable to unitholders from investment activities (see above) Retained distribution on accumulation units Closing net assets attributable to unitholders 169, ,052 (81) (31) 34,548 61,356 13,752 8,633 1,146, ,041 Comparative information is provided for the Statement of Change in Net Assets Attributable to Unitholders. Since this information is for the prior interim period, the net assets at the end of that period do not correspond to the net assets at the start of the current period. The prices per unit as at 31 March 2014 (unaudited) were: Income units Accumulation units Bid Offer p p

10 Balance Sheet as at 31 March 2014 (unaudited) Assets Investment assets Debtors Cash and bank balances for the period 01 October 2013 to 31 March 2014 (unaudited) 31/03/14 30/09/ ,135, ,595 12,339 9,372 5,754 4,881 Total other assets 18,093 14,253 Total assets 1,153, ,848 Liabilities Investment liabilities (40) (45) Creditors (6,658) (9,187) Distribution payable on income units (1,062) (953) Total other liabilities (7,720) (10,140) Total liabilities (7,760) (10,185) Net assets attributable to unitholders 1,146, ,663 Accounting and Distribution policies Basis of accounting The interim financial statements have been prepared on the same basis as the audited annual financial statements for the year ended 30 September They have been prepared under the historical cost basis, as modified by the revaluation of investments, and in accordance with the Statement of Recommended Practice (SORP) for Financial Statements of Authorised Funds issued by the Investment Management Association (IMA) in October 2010 (the IMA SORP 2010). Directors' Certificate This report is certified in accordance with the requirements of the rules in the Financial Conduct Authority's Collective Investment Schemes Sourcebook. Directors A. M. Croft D. J. Lamb London 29 May

11 Distribution Tables Distributions in pence per unit Group 1 First interim Units purchased prior to 1 October 2013 Second interim Units purchased prior to 1 January 2014 Group 2 First interim Units purchased on or after 1 October 2013 to 31 December 2013 Second interim Units purchased on or after 1 January 2014 to 31 March 2014 Income Net revenue Equalisation Distributions paid to/ payable 31/05/14 Distributions paid to 31/05/13 Group 1 (p) (p) (p) (p) First interim Second interim Group 2 (p) (p) (p) (p) First interim Second interim Accumulation Net revenue Equalisation Distributions paid to/ payable 31/05/14 Distributions paid to 31/05/13 Group 1 (p) (p) (p) (p) First interim Second interim Group 2 (p) (p) (p) (p) First interim Second interim

12 General Information The Trust St. James's Place UK and International Income Unit Trust is an authorised Unit Trust scheme under section 243 of the Financial Services and Markets Act (2000) and is constituted by a Trust Deed dated 15 September The Unit Trust is subject to the rules of the Financial Conduct Authority's Collective Investment Scheme Sourcebook and is classified as a UCITS Scheme. The Trust Manager The Manager of the Trust is St. James's Place Unit Trust Group Limited which is a member of the IMA and is authorised and regulated by the Financial Conduct Authority. Investment Objectives The investment objective of the Scheme is to achieve a level of income in excess of the average yield of the stocks comprising the FTSE All-Share Index with the potential for capital appreciation over the medium to long-term. The Scheme will be invested primarily in UK and international equities. The Scheme is also permitted to invest in other types of transferable securities, UK and overseas fixed interest and index-linked securities, units and/or shares in collective investment schemes, money market instruments, deposits, cash and near cash, and derivatives and forward transactions for the purposes of efficient portfolio management (including hedging). Please note that with effect from 4 August 2014, the above reference to the FTSE All-Share Index will be removed from the investment objective of the Unit Trust and the first sentence will be amended as follows: The investment objective of the Scheme is to achieve an above average level of income with the potential for capital appreciation over the medium to long-term. It is the Manager's intention that the assets of the Unit Trust will be invested so that the Unit Trust will be eligible for inclusion in an ISA. European Savings Directive It is the Manager's intention that the Trust will not normally hold 15% or more of its value in money debt instruments. Efficient Portfolio Management The efficient portfolio management techniques permitted in the fund as at 31 March 2014 comprise of: Technique Counterparty Exposure ( ) Currency Forwards UBS AG London 196,552,960 The revenues in the period were nil with no collateral placed or received. Unit Dealings Dealings on the Trust take place on a daily basis. Purchase or sale instructions can be made by telephone or in writing to St. James's Place Unit Trust Group Limited, PO Box 9034, Chelmsford, CM99 2XA, United Kingdom, freephone: The Manager adopts a policy of forward pricing, i.e. the order will be transacted on the dealing day following receipt of the client's instructions, or if received before noon, on that dealing day. In the case of telephone purchases of units from the Manager, settlement must be by return of post after receipt of the contract note. In the case of telephone redemptions, the proceeds will not become payable until the receipt at the Administration Centre of a written request. A contract note confirming the subscription or redemption price and the number of units involved will be forwarded, together with a cancellation notice, where appropriate, on the next business day. The most recent issue and redemption prices will be published on the Manager's website: and are available by calling the Administration Centre on

13 General Information (continued) Minimum Investment The minimum lump sum investment is 1,500, thereafter the minimum additional investment is 1,000. The minimum monthly investment is 150 and the minimum monthly increment is 50. The minimum annual investment is 1,500 and the minimum annual increment is 500. Management Charges The Trust Deed permits the following management charges which are receivable by the Manager: (a) A Preliminary Charge of 5 per cent which is included in the offer price of the Units. (b) An Annual Management Charge at a rate of 1.27 per cent of the value of the Trust. Income Distributions Income distributions are made quarterly on or before the 28 February, 31 May, 31 August and 30 November. Accumulation Distributions Revenue due to accumulation unitholders is reflected in the price of their units. Tax Vouchers Income unitholders that receive income distributions by direct credit and accumulation unitholders (where the distribution income is reinvested) receive an annual consolidated tax voucher in May with all the relevant payment and tax information required to complete a tax return. Tax vouchers will be enclosed if income unitholders receive payment by cheque. Report A report is sent semi-annually to all unitholders on or before 31 May and 30 November. Capital Gains Tax The Trust is not liable to tax on capital gains and any individual holding units will not be liable to capital gains tax unless the total chargeable gains for the tax year 2014/2015 exceed 11,000 (2013/ ,900). To calculate capital gains on accumulation units, the total amount of reinvested net revenue (shown on the annual tax credit vouchers) should be added to the base cost of the units purchased. Unitholders should consult their professional advisers for any advice regarding their tax position. 12

14 St. James s Place Unit Trust Group Ltd is authorised and regulated by the Financial Conduct Authority. St. James s Place Unit Trust Group Ltd Registered Office: St. James s Place House, 1 Tetbury Road, Cirencester, Gloucestershire, GL7 1FP, United Kingdom. Registered in England Number Perivan Financial Print UK & International Income (5/14)